Non-dom numbers drop to record low

According to the latest data from HM Revenue & Customs (HMRC), the number of non-domiciled people living in the UK has fallen to its lowest number on record.

Those with non-domicile tax status, commonly referred to as non-doms fell to 78,300 in the 2017/18 tax year, a drop of around 13 per cent on the previous year.

The sudden decline in non-doms is thoughts to have contributed to a £2 billion decline in tax income to the exchequer, with the revenue only receiving £7.5 billion last year from this group.

It is thought that this sudden decline in people with non-dom status is due to a higher number of wealthy people leaving the UK because of Brexit uncertainty, as well as fears that the UK could tax wealth more heavily under an alternative Government.

Non-dom status ensures that individuals can only be taxed on income and capital gains arising in the UK, but not on income and gains generated overseas.

HMRC have indicated that part of the reason for fewer non-doms was because many had chosen to change their status to be UK-domiciled after the introduction of the annual “non-dom levy” in 2017.

The levy of between £30,000 and £60,000 allows non-doms to continue to pay no tax on offshore income and capital gains if they bring the money to the UK.

A Treasury spokesperson said: “We believe those who choose to live in the UK for a long time should pay taxes here like everybody else. That’s why we changed the rules so that individuals who have been resident in the UK for at least 15 out of the last 20 tax years are now deemed to be domiciled in the UK.”